The latest data released by the NCC, the industry regulator, show that internet subscriptions stood at 148.1 million in February representing y/y growth of 13%. The figure implies density of 75% in a population estimated at 198 million, placing Nigeria well above the African average of around 16% as indicated by McKinsey. In December, we noticed a decline in internet subscriptions. There were c.2.8m disconnected lines when compared with the previous month. The disconnections can be largely attributed to the ongoing National Identification Number (NIN) and Subscriber Identity Module (SIM) integration exercise. It seems some customers prefer to manage just one SIM due to the stress-related issues linked to the NIN-SIM linkage process.
The NCC data show that in February, MTN Nigeria (MTNN) accounted for the largest share (42%) of total subscriptions. We noticed from the commission's data that in February MTNN recorded a -1.8% m/m decrease in internet subscriptions in February. Airtel and 9mobile also recorded m/m decreases of -2.7% and -3.6% respectively.
The mandatory push into the virtual landscape due to the COVID-19 pandemic has further exposed the infrastructure gaps within the country's technology sector.
Nigerian students and youths are among the highest users of internet services within the country. Based on an analysis of the digital quality of life index in 2020, Nigeria ranked 81st out of 85 countries.
Broadband penetration currently stands at 42.1%. The FGN targets 76% this year. Anambra state recently waived right-of-way (RoW) fees for telecom operators. This is part of the state's efforts to drive broadband expansion. We understand that 29 out of 36 states in the country are yet to implement the FGN's proposed N145/m RoW fee. The states that have applied the N145/m RoW rate are Kaduna, Katsina, Plateau, Ekiti, Kwara, Anambra and Imo.
Many states continue to charge relatively high RoW fees. Industry sources suggest that, in Lagos it costs telcom companies as high as N1,500 per linear metre of fibre in RoW charges. The absence of a unified RoW fee across the country continuously stalls the advancement of broadband fibre networks.
In Nigeria, mobile network operators roll out the majority of fibre cables across the country, with MTN, Airtel and Glo laying 64% (34,436km) of the total fibre distance (54,000km) currently covered. Peer countries like Kenya charge no RoW fees to its operators. Kenya has been able to achieve a broadband penetration of 85%. The reduction in RoW charges will largely incentivise the expansion of fibre networks by telecom operators in Nigeria.
The national broadband plan seeks to deliver data download speeds across Nigeria at a minimum of 25Mbps in urban areas, and 10Mbps in rural areas with effective coverage available to at least 90 per cent of the population by 2025 at a maximum price of N390 per 1GB of data. These targets seem ambitious. However, they can be achieved with well targeted investments into the sector.
According to the latest national accounts, telecommunications posted double digit growth of 15.9% y/y in 2020. The segment was already expanding rapidly and has been further boosted by the prevalence of working from home due to the COVID-19 pandemic.